How To Win Your Property Tax Appeal? Here Are 5 Steps To Follow
It is important for New Jersey property owners to understand that property taxes are not fixed expenses. Successfully appealing your tax assessment may create opportunities for hundreds or even thousands of dollars in yearly savings. With that being said, below are five basic steps that can increase your chances of winning a tax appeal:
Before you challenge your property tax assessment, you should determine whether your property is over-assessed. Not every municipality assesses its properties at 100% of true market value and it is important to be familiar with the applicable “equalization” ratio in effect for each tax year, since the ratio will allow a taxpayer to determine the market value suggested by the assessment. These ratios are released on a yearly basis and are available on the New Jersey Division of Taxation’s website. Sometimes, appeals become a matter of timing since a majority of municipalities re-assess properties every three to five years. You should review your assessment every year and identify whether your property is over-assessed.
Filing a property tax appeal requires strict adherence to state procedures and deadlines. It is vital to research and understand these rules prior to filing an appeal. In most circumstances, your appeal will be filed with the County Tax Board in the county where your property is located. In New Jersey, appeals generally must be filed on or before April 1st, or within 45 days of the mailing of the Assessment Notice. Some other counties follow an earlier deadline, and a select few follow a later deadline if a municipal-wide reassessment has been performed. After the appeal is filed, a hearing in front of the County Tax Board is typically scheduled. If your property is assessed at over $1 million, or the added or omitted assessment exceeds $750,000, you may file your property tax appeal directly with the New Jersey Tax Court instead of with the County Board of Appeals. It is crucial to research and follow all state tax appeal deadlines and procedures.
Aside from filing on time, your appeal must include the proper filing fee. The filing fee for tax appeals depends upon the assessed value of the property. For example:
County Tax Board: $5 filing fee for a property assessed under $150,000
County Tax Board: $25 filing fee for a property assessed between $150,000 and $500,000
County Tax Board: $100 filing fee for a property assessed between $500,000 and $1,000,000
County Tax Board: $150 filing fee for a property assessed above $1,000,000
Small Claims Tax Court: $50 filing fee plus $10 for each additional adjoining lot (any residential property and any commercial/industrial property whose taxes were less than $25k for the prior tax year are classified as small claims)
Tax Court: $250 filing fee plus $50 for each additional adjoining lot (any commercial/industrial property whose taxes were more than $25k the prior tax year, as well as vacant land and multi-family residential properties)
After you decide to move forward with filing your appeal, the next step is to prepare supporting evidence for the appeal. You must present the County Tax Board with concrete reasons why you believe your property is over-assessed. Did the assessor list your property at a greater square footage total than it actually has? Are you being assessed based on a misinterpretation of the real estate market? Regardless of the reason, it’s essential to prepare substantial supporting evidence to prove that your property is over-assessed. Sales of comparable properties are usually the best evidence to determine a particular property’s value. Your evidence at the County Tax Board is due seven days before your appeal hearing. The County Tax Board must provide hearings and decisions for all properties within three months of the filing deadline unless extended by the New Jersey Division of Taxation. Judgments are usually mailed out shortly thereafter.
Individuals whose homes are assessed above $1,000,000 are not the only ones who are able to appeal to the New Jersey Tax Court. Following the hearing and decision of the County Tax Board, you may then appeal their decision to the New Jersey Tax Court. You have forty-five (45) days from the date the County Tax Board’s decision was mailed to file a complaint with the New Jersey Tax Court.
Under New Jersey’s “Freeze Act,” your new assessment will be good, or “frozen,” for two additional years (three years in total counting the year under appeal) unless the municipality undergoes a revaluation or reassessment of properties during one of the freeze years or there is a substantial change in the value of your property during one of the freeze years (i.e. you put an addition on your home or get a zoning change for a higher and better use).
While the guidelines above provide a basic outline of the process, tax appeals can be complicated and each case presents its own intricacies. From advising on the timing of appeals to contributing expert knowledge about local real estate markets, an experienced tax appeal attorney can help you navigate through the specifics of each individual case. McKirdy, Riskin, Olson & DellaPelle, P.C. has specialized in this particular field for over fifty years. Please feel free to contact us for a complimentary consultation.